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Enterprises over-spending by more than US$8.75 million on cloud services

Enterprises over-spending by more than US$8.75 million on cloud services

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Couchbase, provider of a leading modern database for enterprise applications, has released research showing that factors such as inflexible pricing plans, management tools that don’t give the level of control users need and data not being stored where it needs to be, are adding more than 35% to enterprise cloud costs. With a typical enterprise spending more than US$33 million a year on cloud services according to the research, this represents more than US$8.75 million that could be saved or spent elsewhere if enterprises and cloud service providers can solve these challenges.

The survey of 650 senior IT decision-makers found:

  • More than one-third (36%) of enterprises said cloud services adopted in the last three years had not met expectations, while 56% said past cloud decisions had made Digital Transformation projects more difficult in 2021 and 48% more expensive.
  • The factors adding to costs included not having enough insight into spend or ways to optimise costs; the need to improve security and compliance functionality; inflexible pricing plans that don’t give enterprises what they need in a single package; management tools that don’t give the control needed; data not being stored where needed to meet regulatory or performance requirements; and vendor lock-in, meaning enterprises cannot use the specific cloud infrastructure they want.
  • 61% of enterprises have had to restrict their Digital Transformation ambitions because of challenges with cloud services; while 58% have chosen cloud services that did not give the ability to scale the business to meet demand.
  • 95% of enterprises said that increased movement of infrastructure to the cloud is ‘inevitable.’

“There’s no denying the impact of the cloud, from giving large enterprises increased scalability and agility, to giving smaller enterprises access to services and applications they could never implement in-house,” said Ravi Mayuram, Chief Technology Officer of Couchbase. “Businesses believe they are getting what they need, or else we wouldn’t be seeing this seemingly unstoppable momentum. The question is whether they could be getting even more – US$8.75 million is too much to just be a cost of doing business. If enterprises raise their expectations and service providers address inefficiencies, they could open up new opportunities for Digital Transformation – or simply reduce their costs.”

Despite the costs and challenges they face, enterprises are optimistic about the cloud. Almost every respondent is confident that their cloud services are giving them the levels of security, availability, performance, cost-effectiveness, control, scalability and compliance they need.

Asked to identify their top concerns around new cloud infrastructure, security of data was identified by 43% of respondents, followed by managing data in the cloud (33%) and future-proofing to meet future digital needs (31%), while 30% are concerned about keeping costs under control in the future.

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